2.05.2016 Bayer Offers to Acquire
Monsanto to Create a Global Leader in Agriculture

USD 122 per share all-cash offer, valuing Monsanto at USD 62 billion,
represents immediate and certain value at a substantial premium for
Monsanto shareholders / Creates leading integrated agriculture business
with broad product portfolio and exceptional R&D pipeline to
deliver valuable and innovative solutions for farmers / Compelling
value-creation potential with core EPS accretion by mid-single digit
percentage in the first full year after closing and double-digit
percentage thereafter / Expected total synergies of approximately USD
1.5 billion after year three plus additional integrated offer benefits
in future years / Strong free cash flow generation enables rapid
deleveraging post-acquisition / Reinforces Bayer as a global
innovation-driven Life Science company with leadership positions in its
core segments
Leverkusen, May 23, 2016 – In response to further market speculation
and stakeholder inquiries, Bayer is publicly disclosing the contents of
its private proposal to acquire Monsanto. Bayer has made an all-cash
offer to acquire all of the issued and outstanding shares of common
stock of Monsanto Company for USD 122 per share or an aggregate value
of USD 62 billion. This offer, based on Bayer’s written proposal to
Monsanto dated May 10, 2016, represents a substantial premium of:
- 37 percent over Monsanto’s closing share price of
USD 89.03 on May 9, 2016
- 36 percent over the three-month volume weighted
average share price
- 33 percent over the six-month volume weighted
average share price
- Last twelve months EBITDA multiple of 15.8x as of
February 29, 2016

The acquisition of Monsanto would be a compelling opportunity to create
a global agriculture leader, while reinforcing Bayer as a Life Science
company with a deepened position in a long-term growth industry. The
combination is expected to provide Bayer’s shareholders with accretion
to core EPS by a mid-single-digit percentage in the first full year
after closing and a double-digit percentage thereafter. Initially,
Bayer expects annual earnings contributions from total synergies of
approximately USD 1.5 billion after year three plus additional
integrated offer benefits in future years.

“We have long respected Monsanto’s business and share their vision to
create an integrated business that we believe is capable of generating
substantial value for both companies’ shareholders,” said Werner
Baumann, CEO of Bayer AG. “Together we would draw on the collective
expertise of both companies to build a leading agriculture player with
exceptional innovation capabilities to the benefit of farmers,
consumers, our employees and the communities in which we operate.”

This transaction would bring together leading Seeds & Traits, Crop
Protection, Biologics, and Digital Farming platforms. Specifically, the
combined business would benefit from Monsanto’s leadership in Seeds
& Traits and Bayer’s broad Crop Protection product line across a
comprehensive range of indications and crops. The combination would
also be truly complementary from a geographic perspective,
significantly expanding Bayer’s long-standing presence in the Americas
and its position in Europe and Asia/Pacific. Customers of both
companies would benefit from the broad product portfolio and the deep
R&D pipeline.

“Bayer is committed to enabling farmers to sustainably produce enough
healthy, safe and affordable food capable of feeding the world’s
growing population,” said Liam Condon, member of the Board of
Management of Bayer AG and head of the Crop Science Division. “Faced
with the complex challenge of operating in a resource-constrained world
with increasing climate volatility, there is a clear need for more
innovative solutions that advance the next generation of farming. By
supporting farmers of all sizes on every continent, the combined
business would be positioned as the partner of choice for truly
integrated, superior solutions.”

Under the proposed transaction, the combined business would provide
attractive opportunities for the employees of both companies and have
its global Seeds & Traits and North American commercial
headquarters in St. Louis, Missouri, its global Crop Protection and
divisional Crop Science headquarters in Monheim, Germany, and an
important presence in Durham, North Carolina, as well as many other
locations throughout the U.S. and around the world. Digital Farming for
the combined business would be based near San Francisco, California.

Bayer is highly confident in its ability to finance the transaction
based on advanced discussions with and support from its financing
banks, BofA Merrill Lynch and Credit Suisse. The offer is not subject
to a financing condition. Bayer intends to finance the transaction with
a combination of debt and equity. The expected equity portion
represents approximately 25 percent of the transaction’s enterprise
value and is expected to be raised primarily via a rights offering.

The strong cash flow generation of the combined business as well as
Bayer’s track record of disciplined deleveraging after large
acquisitions would enable rapid deleveraging post-acquisition. This is
in line with Bayer’s target of an investment-grade rating immediately
after closing of the transaction and its commitment to the single “A”
credit rating category in the long term. Bayer has a successful track
record of working with global authorities to secure the necessary
regulatory approvals and has extensive experience integrating
acquisitions from a business, geographic, and cultural perspective.

Bayer’s Board of Management and Supervisory Board unanimously approved
the proposal and are fully committed to pursuing the transaction. Bayer
is prepared to proceed immediately to due diligence and negotiations
and to quickly agree to a transaction. The transaction will be subject
to customary closing conditions.

BofA Merrill Lynch and Credit Suisse are acting as lead financial
advisors to Bayer and support the financing of the transaction;
Rothschild has been retained as an additional financial advisor to
Bayer. Bayer’s legal advisors are Sullivan & Cromwell LLP (M&A)
and Allen & Overy LLP (Financing).

Bayer: Science For A Better Life

Bayer is a global enterprise with core competencies in the Life Science
fields of health care and agriculture. Its products and services are
designed to benefit people and improve their quality of life. At the
same time, the Group aims to create value through innovation, growth
and high earning power. Bayer is committed to the principles of
sustainable development and to its social and ethical responsibilities
as a corporate citizen. In fiscal 2015, the Group employed around
117,000 people and had sales of EUR 46.3 billion. Capital expenditures
amounted to EUR 2.6 billion, R&D expenses to EUR 4.3 billion. These
figures include those for the high-tech polymers business, which was
floated on the stock market as an independent company named Covestro on
October 6, 2015. For more information, go to www.bayer.com.

Please see below the private letter Bayer shared with Monsanto on May
10, 2016.

Thank you for taking the initiative to arrange the recent meeting
between us on April 18, 2016. I appreciated the opportunity to hear
your views on the value of a globally integrated agriculture platform
and your vision that a combination of Seeds & Traits, Crop
Protection, Biologics, and Digital Farming would be a winning formula.
On behalf of Bayer, I am pleased to provide this letter to you to
confirm our strong interest in a business combination with Monsanto. As
you mentioned, a Monsanto and Bayer combination offers the best
strategic fit in the industry. Additionally, we believe this
combination offers a unique and compelling opportunity to maximize
value for both our companies’ shareholders. This letter outlines the
terms of our proposal, which has been unanimously approved by our Board
of Management and has the support of the Chairman of our Supervisory
Board.

Bayer has long respected Monsanto’s business, management team, strong
innovation capabilities and commitment to farmers. Over the years we
have had multiple discussions regarding potential avenues to realize
our shared vision regarding an integrated approach and strategy to the
agricultural industry. The combination would create a truly global
agriculture leader with a comprehensive and balanced product line
across business segments and geographies. This would bring together
Monsanto’s leadership in Seeds & Traits with Bayer’s leadership in
Crop Protection and Biologics, and our combined focus on Digital
Farming. Additionally, we would also combine our research and
development capabilities, creating an innovation powerhouse to develop
solutions for farmers around the world.

Our Proposal
Price: We are prepared to acquire all of the issued and outstanding
shares of Monsanto for $122 per share in cash. We believe this all-cash
offer presents Monsanto shareholders the best opportunity to maximize
the full value of their shares immediately, with certainty. Our offer
represents:
- A premium of 37% over the closing share price on
May 9, 2016
- A premium of 36% over the three-month volume
weighted average share price
- A premium of 33% over the six-month volume weighted
average share price
- A last twelve months EBITDA multiple of 15.8x as of
February 29, 2016
Our proposal fully values Monsanto including its pipeline and also
shares the benefits of the combination, the very benefits you outlined
in detail in your proposed transaction with Syngenta.

Financing: Our all-cash offer provides transaction certainty and would
not be subject to a financing condition. Together with our financial
advisors, BofA Merrill Lynch and Credit Suisse, we have engaged in an
extensive analysis of the potential financing options available to
Bayer and we are highly confident in our ability to secure full
financing commitments prior to announcement. Our financial advisors
have provided us with highly confident letters for the proposed
transaction.

Regulatory: Bayer has a highly successful track record working together
with global authorities to gain regulatory approvals, given our prior
acquisition experience including Aventis CropScience, Schering AG, and
Merck Consumer Care. Together with our legal advisor, Sullivan &
Cromwell LLP, we have analyzed the potential regulatory aspects and are
very confident that we will be able to obtain all necessary approvals
in a timely manner.

Integration: We have extensive experience in successfully integrating
acquisitions from a business, geographic, and cultural perspective. We
foresee no impediments to effectively integrating our respective
organizations, especially given our complementary business segments,
geographies, and success-driven cultures. We would propose that the new
global Seeds & Traits and North American commercial headquarters,
as well as the research and development center for Seeds & Traits
be based in St. Louis, Missouri. Additionally, we anticipate Digital
Farming for the combined company would be based near San Francisco,
California. We will provide meaningful additional opportunities for
employees of both companies.

Timing: Bayer is prepared to move expeditiously to complete customary
due diligence, negotiate and execute definitive transaction
documentation, and announce the proposed combination. Given the
significant time and resources we have already devoted to analyzing
this potential combination, we can complete this process quickly, with
minimal disruption to Monsanto’s business or its employees.
Additionally, given the substantial benefits of the combination, we
believe that it is important that both of our companies commence
negotiations immediately.

This letter is being submitted to you on the understanding that its
contents will be kept confidential and will not be disclosed to any
person other than Monsanto’s Board of Directors, senior officers, and
financial and legal advisors. The proposal outlined in this letter is
based on publicly available information and any transaction would be
subject to our satisfactory due diligence review, the negotiation and
execution of mutually satisfactory definitive transaction
documentation, and other usual and customary conditions for
transactions of this nature.

We completely agree with the vision of an integrated crop solution
strategy you described during our meeting on April 18, 2016.
Additionally, we are convinced that a business combination between
Monsanto and Bayer represents a unique and truly compelling opportunity
to create a global leader in agriculture. We believe that our proposal
maximizes immediate value and provides certainty for Monsanto
shareholders while creating significant benefits for farmers, employees
and our communities. As a result, we are fully committed to completing
this transaction. Our strong preference is to engage in a constructive
process and work together to achieve a mutually beneficial outcome.

We remain at your disposal, and that of your Board of Directors, to
address any questions you may have and we appreciate and look forward
to your consideration and timely response.

Yours sincerely,

Werner Baumann
Bayer AG
Chairman of the Board of Management

Liam Condon
Bayer AG
President Crop Science Division

Note to editors:

Further information is available on the internet at:
www.advancingtogether.com

Transcripts and audio recordings of all conference calls will be
available afterwards.

Print-quality photos can be downloaded from our website at:
www.news.bayer.com

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Forward-Looking Statements
This release may contain forward-looking statements based on current
assumptions and forecasts made by Bayer management. Various known and
unknown risks, uncertainties and other factors could lead to material
differences between the actual future results, financial situation,
development or performance of the company and the estimates given here.
These factors include those discussed in Bayer’s public reports which
are available on the Bayer website at www.bayer.com. The company
assumes no liability whatsoever to update these forward-looking
statements or to conform them to future events or developments.

Additional Information
This communication relates to a proposed offer by Bayer
Aktiengesellschaft or its subsidiaries (“Bayer”), to purchase all of
the outstanding shares of common stock, par value $0.01 per share, of
Monsanto Company, a Delaware corporation (“Monsanto”). This
communication is neither an offer to purchase nor a solicitation of an
offer to sell shares of Monsanto. No tender offer for the shares of
Monsanto has commenced at this time. At the time a tender offer for the
shares of Monsanto is commenced, Bayer will file tender offer materials
(including an Offer to Purchase, a related Letter of Transmittal and
certain other offer documents) with the Securities and Exchange
Commission (the “SEC”) with respect to the tender offer. Any definitive
tender offer documents will be mailed to the stockholders of Monsanto.
STOCKHOLDERS OF MONSANTO ARE URGED TO READ THE RELEVANT TENDER OFFER
MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE TENDER OFFER THAT STOCKHOLDERS SHOULD
CONSIDER BEFORE MAKING ANY DECISION REGARDING THE TENDER OF THEIR
SHARES. Stockholders of Monsanto will be able to obtain free copies of
these documents (if and when available) and other documents filed by
Bayer with the SEC through the website maintained by the SEC at
www.sec.gov.